The Patient Protection and Affordable Care Act (“Act”) was enacted into law by President Obama on March 23, 2010 1. The Act was modified shortly thereafter by the Health Care and Education Reconciliation Act of 2010 2. The combined legislation weighs in at over 2,000 pages and has been considered a historic event for the American healthcare and health insurance industries. However, this legislation includes many provisions and programs which are not the subject of nightly news reports.

As health lawyers, our roster of clients includes hospitals, universities, institutes, and businesses associated with the biological sciences. Many of these clients engage in medical research. For any medical researcher, finding sources of funding is prerequisite to scientific progress. What most clients may not be aware of is that hidden within the depths of the Act are significant sources of funding for healthcare research. By revealing new sources of funding, health lawyers can add value to their relationships with clients engaged in medical research.

Cures Acceleration Network

Tucked away near the end of the Act, Section 10409 establishes a “Cures Acceleration Network” (“CAN”). 3This legislation is aimed at closing off the so-called “ Valley of Death”—that “chasm” that must be crossed to move basic research discoveries to the point of market-available treatments. 4In a letter to the Senate Appropriations Committee, signed by more than 75 advocacy organizations, the CAN is described as a “vital new approach to moving high need medical cures through the development pipeline faster – giving hope to millions of patients and their families throughout the country.” 5

The CAN program, as drafted in the Act, is to be established within the Office of the Director of the National Institutes of Health (“NIH”). Pursuant to Section 10409 of the Act, the functions of the CAN include conducting and supporting “revolutionary advances in basic research, translating scientific discovery from bench to bedside” 6, awarding grants and contracts to eligible entities to support such research, and providing additional resources necessary to participating entities to support development of High Need Cures, defined as:

a drug, biological product, or device that, in the determination of the Director of NIH—(A) is a priority to diagnose, mitigate, prevent, or treat harm from any disease or condition; and (B) for which the incentives of the commercial market are unlikely to result in its adequate or timely development. 7

In sum, the goals of the CAN program are to:

Promote innovation in technologies to support the advanced research and development and production of High Need Cures;

Accelerate the development of High Need Cures utilizing medical products, behavior therapies, or biomarkers, or;

Assist recipients of CAN awards with establishing protocols that comply with the Food and Drug Administration standards throughout all stages of the development of a medical product. 8

Further guidance as to what particular conditions or diseases may in fact fit under this definition has not yet been issued, and it is unclear when such guidance may be forthcoming. Senator Arlen Specter, who sponsored the bill that eventually became Section 10409, has developed a website devoted to the Cures Acceleration Network. Both Senator Specter’s website and other committee reports suggest that cancer, autism, Parkinson’s, Alzheimer’s, and diabetes fit the definition. 9

The Act appropriates $500 million to CAN for fiscal year 2010, “and such sums as may be necessary for subsequent fiscal years.” 10The funding appropriated for 2010 and subsequent years is to be divided into three types of awards, all of which will be awarded on a competitive basis. 11

1. Cures Acceleration Partnership Awards. Under this type of award, an eligible entity may be awarded up to $15 million per project for the first fiscal year for which the project is funded, which will be paid in one payment. In subsequent years, the entity may re-apply for additional funding up to $15 million each subsequent fiscal year. As a condition to receiving a Partnership Award, the entity must provide matching non-Federal funds in the amount of $1 for every $3 awarded under the Cures Acceleration Partnership Award (although the Director of NIH has discretion in waiving or modifying such requirements ”where the Director determines that the goals and objectives . . . cannot adequately be carried out unless such requirement is waived.”). 12

2. Cures Acceleration Grant Awards. An eligible entity receiving a grant may be awarded up to $15 million per project for the first fiscal year for which the project is funded, also to be paid in one payment. In subsequent years, the entity may re-apply for additional funding up to $15 million each subsequent fiscal year. No matching funds are required under this supplementary grant-type award. 13

3. Cures Acceleration Flexible Research. Up to 20 percent of the total funds appropriated for each fiscal year may be directed into this award category, under which the Director of NIH “shall have flexible research authority to use other transactions to fund projects” if “the goals and objectives of [§ 10409] cannot adequately be carried out through a contract, grant, or cooperative agreement.” 14

Eligible entities for the funding under Section 10409 of the Act include public or private entities, including private or public research institutions, institutions of higher education, medical centers, biotechnology companies, pharmaceutical companies, disease advocacy organizations, patient advocacy organizations, and academic research institutions. 15

Summary

Clients or potential clients engaged in medical research may benefit from CAN. Due to the broad scope of eligibility requirements, almost any medical researcher would be eligible to apply for funding. In addition, the definition of “High Need Cures” is sufficiently vague that almost any disease could arguably fit within its rubric. While there are many research and grant programs in PPACA of which we want to make our clients aware, CAN is particularly interesting because it has broader applicability than most grant programs found in PPACA. Furthermore, PPACA significantly expands the role of NIH into the world of translational research, in addition to the agency’s already expansive role in basic scientific research. As health lawyers, we can best serve our medical research clients by being aware of the provisions outlined in CAN. The CAN presents a potential benefit for medical researchers in terms of access to funding for projects, and the savvy medical research clients will most benefit by positioning themselves to immediately take advantage of the unique opportunities offered by CAN.

Eg. Specter for the Cure, available at: http://specterforthecure.com (stating “The sufferers of cancer, autism, Parkinson’s, Alzheimer’s, diabetes and too many other afflictions have waited long enough. It’s time we unleashed the cure. ¶ Senator Specter has introduced legislation to transform medical research by creating the Cures Acceleration Network (‘CAN’) – a new institution, answering to the President of the United States, the sole mission of which is to turn medical research into disease cures.”)